SOEs to submit business plans

ALL State-Owned Enterprises (SOEs) will have to draw up and submit business plans in future which must be submitted to the newly established SOE Governance Council and their line Ministries so that these entities can be held accountable to the subsidies made to them from State coffers.

Finance Minister Saara Kuugongelwa-Amadhila said in her reply to the debate on the new N$25,5 billion national budget in Parliament on Tuesday that all bosses of SOEs would also have to sign performance agreements and they would have to stick to specific performance targets.
‘As these arrangements are being made, we are targeting any subsidies to specific programmes and are holding SOEs accountable for the resources they get,’ the Finance Minister told Members.
‘There seems however to be little appreciation that some subsidies (from Government) are intended to reduce prices for essential services to make them affordable to the poor. While some SOEs continue to perform poorly, there is an increasing number of them who have improved their performances and some SOEs pay dividends to the shareholder (Government),’ she added.
The Minister warned that ‘even the usually better performing SOEs may feel the pinch of the global crisis and see their profits reduced.’
Reacting to a proposal made by Prime Minister Nahas Angula last week during the debate to include investments planned by SOEs into the annual budget, Kuugongelwa-Amadhila said this is being done already in the Medium Term Expenditure Framework (MTEF).
She said the Procurement Act, which regulates acquisitions made by Government for goods and services, would be amended and introduced in Parliament this year.
The amendments would allow a larger share of small and medium enterprises (SMEs) to benefit, she said.
‘Through the existing preferences already a total of N$227 million in public tenders have been allocated to SMEs between 2005 and the 2008-09 financial year ending last month’, the Minister pointed out.
Government’s envisaged black economic empowerment (BEE) policy would make it a precondition that in order to do business with the State, ‘numerical targets for local ownership’ in companies would be required.
Another BEE exercise, the Financial Service Charter mapped out the financial sector, has been completed and will be launched soon by her, the Minister told Parliament Tuesday.
‘Although the Charter is voluntary, there is consensus among the industry that all signatories must comply with its provisions and Government will hold the finance industry its commitments made under the Charter,’ the Finance Minister emphasised.